"In his speech, Mr Bush dismissed what he called the "exaggerated estimates" of the cost. And he added: "The costs are necessary when we consider the cost of a strategic victory for our enemies in Iraq." The BBC’s Richard Lister in Washington said that the speech conspicuously lacked any references to Iraqi weapons of mass destruction – the removal of which had been the stated aim of the war. President Bush appeared to be attempting to redefine the invasion as a mission to remove Saddam Hussein, our correspondent said. BBC
———————————————————————–
The president is still "sure." You can see that in the scowling demeanor. You can hear it in the taut voice, the twangy folksiness of the voice, so reminiscent of one of the "characters" in "No Country for Old Men."
As I write this, I hear Obama in the background. He is speaking at Fayetteville with "Iron Mike’s" statue lurking in the background at Ft. Bragg. "Iron Mike" is the archtypical enlisted paratrooper. Obama says that he is going to withdraw from Iraq. Bush says that there will be no more serious withdrawals unless the generals on the ground say there should be. Guess what that means. That means an "endless war," in Obama’s phrase. Generals don’t vote to take responsibility for national policy decisions. They are by nature, and the nature of the process that made them generals, far too risk averse for that. If a decision to make war or not to make war is left to them they will pretty much always vote for the status quo.
Bush’s Pentagon speech today contained no time line for the evolution of the war. War without end, Amen. How long before the American people start to walk away from "Iron Mike" in disgust? The applause for Bush at the Pentagon today will be remembered. I remember a time when my friend Mike could not walk down the street wearing his uniform. I do not want to see that again.
Bush, perhaps deliberately, dances, bobs, weaves and scowls over the identity of the enemy, and the reasons that he and the Jacobin neocons gave us for going to war. Much of that argumentation has been "exploded" by the failure to find it anywhere other than in the pages of rags like "The Weekly Standard" but that does not seem to bother him.
The Vice President seems as insulated from reality as always and absolutely shameless in his public denials of reality in Iraq. What’s the deal with him? Is he really impaired somehow or is it about the money as the "oilies" insist?
Then, there is John McCain. He does seem impaired. Lieberman had to remind him that AQ is a Sunni group who hate the government of Iran?
The Democrats need to sober up and get Hillary and Obama onto the same ticket. I don’t care who gets the top spot.
"Iron Mike" and his buddies deserve to be led by some one other than fools and knaves. pl
“The Democrats need to sober up.” PL
They’re in the middle of a bar room brawl while the town is burning to the ground all around them.
It’s unfortunate when the people who are supposed to save the day are too busy being drunk and disorderly. Bad luck indeed.
This is an extremely interesting post. First, Bush is betting in the long run US interests support his Presidential decisions. Only time can tell that but it precludes any flexibility at this point. It is clear that both Clinton and Obama are trying to adopt and educate Americans on policies at the same time in a relatively sophisticated tradeoff between NOW and the future. Bush does NOT worry about the future. Remarkable thing about his term of office is how effectively dissent and second opinions or alternative policies prohibited from being discussed. Clearly he is bothered by the abstract canvas that his decisions and events have painted for him. Lost in all this is the fact that Bush is still making decisions that will impact the US and especially the military for years. I think the final corruption of the military has occurred during the last 25 years from the historic patronization, ignorance, mistratment, lack of sophistication about the military in a democracy revealed by Presidents from Reagan to George W. Bush. The military is an important skill set because there are still tigers out there in the world. Samuel Huntington’s book “The Soldier and the State” yields important insights for our democracy. I don’t agree with all his theses, including the one that the last knowledgeable defender of our democracy is the military. Yet I understand his argument. One final point, it does appear looking back to 9/11 that the attack had very very important economic impacts on the domestic US economy, still largely undocumented for a variety of reasons, including possibly the possible loss of economic dominance of NYC as the world’s trading and financial center and other impacts such as those on the dollar. The GWOT has added to the strain. It is now clear that the slicky boys (and girls) of WALL STREET had no long term abilities to do other than develop techniques of fraud, waste, and abuse. The off-book deals from Enron to the Banks is just one of the examples. I personally like John McCain, read his books, know some of his classmates USNA -1958), and think he has developed as a wonderful addition to the Senate. But I also remember how close he came to personal destruction as one of the Keating Five in the S&L scandal that cost the public fisc closer to $500B than the announced figures. Ethics does matter. I also worry about these issues with Clinton and Obama. Who will they owe and who will they bring in. Again only time will tell, but it does seem to be a turning point in American history. Perhaps as another said Not the Beginning of the End but certainly the END of the Beginning when the US seemed to be REAGAN’s shining city of light on a hill for what now appears to be a very brief time and largely based on luck not necessarily skill. The world cannot operate successfully without a capable, competent, economically strong US but it is going to take some time to rebuild if it is to happen. Time for hard decisions. First, who has the skills to make them, and then who has the skills to see them through to completion.
“Is he really impaired somehow or is it about the money as the “oilies” insist?”
It is about oil and Bush & Co have been stunningly successful.
The issue is not about “getting” Iraqi oil, it is about suppressing production of cheap-to-produce Iraqi and Iranian oil off of the market.
In any short-term period the world has the ability to produce such a gush of oil that the price would collapse. If the price collapses enough, it becomes un-economic to produce from domestic American oil reserves. The oil companies represented by Bush-Cheney-Saudi committee hold reserves that are increasingly expensive to lift from the earth. For example, Gulf of Mexico oil is very expensive to recover under thousands of feed of water and seabed.
Saudi oil is past peak and probably is also uncompetitive with Iranian and Iraqi oil.
On the other hand, Iraqi and Iranian oil is abundant and very cheap to lift out of the ground.
The goal of the Iraqi occupation and the stirrings against Iran is to increase risk against pumping their oil and keeping it off of the market until the more expensive American-Saudi oil can be sold. If those countries really started producing, the price of oil would drop precipitously.
Of course there is the possibility that they Bush-Cheney-Saudi committee will be able ultimately to get control of the oil in the occupied zones. Also, there has been an added bonus of huge profits from supplying the war, itself.
All of this has been accomplished by printing and borrowing money, much of which has gone directly into the pockets of Bush’s supporters and at the great expense of the American people. Their gambit has backfired on the American people while the beneficiaries of the group continue to be able to extract a private “oil tax” on the people.
As a side benefit, the period of false fear has enabled the creation of an enhanced surveilence-incipient police state that supports the Bush-Cheney-Saudi committee.
It is all about oil and the scheme has been stunningly successful for the intended beneficiaries. If you are an oiler, George Bush’s administration has been the most successful administration for your benefit, ever!
Dick Cheney, “Mission Accomplished!”
I’m glad you’re giving Obama some credit for brains and a plan. I agree that they are both good candidates and maybe should share a ticket if egos can handle it.
(Can’t help remembering the Jon Stewart crack that in the movies when the President is a black man or a white woman, that means the aliens are about to blow up the Statue of Liberty. If they’re on a ticket together, what fresh Apocalypse could this portend? kidding…)
Here’s the transcript of Obama’s Iraq speech, reprinted at Daily Kos:
http://www.dailykos.com/storyonly/2008/3/19/114032/682/108/479934
Maybe some Democrats are being drunk and disorderly – mostly anonymous faceless yammerers on weblogs.
You cannot accuse Barack Obama of behaving in a disorderly manner. He keeps his cool.
To say that Sen. Clinton’s behavior is “drunk and disorderly” is also an exaggeration and not fair. I haven’t liked her tone particularly, and I haven’t liked the choices of her campaign in trying to fight hard, but drunk and disorderly are words that just heighten the sense of disunity. I am not a Clinton supporter but I prefer not to throw such language in her direction. She deserves better.
The disorderly squalling supporters ought to be ignored. It is in the nature of human beings to pick sides and fight; however as a Democrat I prefer to think about November and not get bogged down in this silliness. It reminds me of flame wars amongst online newcomers to neighborhood or hobby-related email groups. Pick, pick, bitch, bitch, resent, resent, accuse, rinse and repeat.
The chief qualification for high political office today is the ability to live a lie and keep up appearances for the public. False pretenses are needed to allow the energy/security industries (and others) to pursue their hidden agenda, doing their dirty work unimpeded by inconvenient questions about the American government’s real goals and intentions.
As a former drunk, Bush excels at living a lie. Given the current state of affairs, we can look forward to more drunks in the White House.
Leila
I was not referring to either candidate. pl
I should have paid more attention – Lina used the term “drunk and disorderly,” not Col. Lang.
One great things about extended primary battles, it really shows candidate characters. How each made long term decision and handle it when it didn’t pan out.
The biggest concern about current primary battle is of course “legal lawsuit” when Hillary uses backroom maneuvering to gain superdelegates to overide pledge one. That would be so damaging, McCain will win for sure. So far tho’ the system seems to hold. (this is definitely testing party unity)
about McCAin: biggest worry is Rove + NSA spying (advantage of ruling regime)
lobbyists and Israel seems to only playing on the background.
Too late! The American people are already walking away from “Iron Mike.” NBC’s Richard Engle reports from Iraq that the U.S. soldiers he’s talked to feel that only their families know or care that they’re there. “The Surge” has worked its magic by bringing about Orwell’s dictum, “War Is Peace.”
Wasn’t it Clemenceau–the WWI French Premier who reportedly had himself buried facing Germany–who said, “War is too important to be left to Generals?” For Bush a burial facing Arlington National Cemetery would seem more appropriate. Cheney of course knows all about “the white crosses row on row” at Arlington. Ah Clemenceau! What a meal you would have made of such pygmies–they did not call you “The Tiger” for nothing.
Bush has no clue what’s coming at him, and his certainty is the bliss of ignorance, no more, no less. The economic wolves are at the door, and the American citizenry is about to learn more than it cares to know about the principle of “opportunity cost”, better known as “guns or butter”. This learning process will not be pretty.
We will soon find that we have fewer choices for our collective future than we have been led to believe by our so-called “leaders”, and as the unfortunate ramifications of our remaining choices become clearer, watch the electorate get angrier. This is not a good year to be a Republican, and things will get a lot worse for the GOP before November’s elections, as the “Main Street vs. Wall Street” fiasco continues to grow more visible.
We simply cannot afford our empire any longer, and nothing the Bush administration can do will change that immutable fact. America is now facing a global margin call, and with its imminent economic demise will come some form of international receivership, with other countries making demands on how we carry out all of our affairs, as part of the bailout bargain we have already seen developing on Wall Street.
It’s certain that those demands will include constraints on the use of U.S. military resources, and especially in the Middle East. We simply are not helping the world economic order by our presence there, regardless of what Bush believes.
In short, we will soon stop taking our military marching orders from Israel, and will likely start getting economic marching orders from China and Dubai instead. The American people are not going to like this outcome one bit, and the pain will have “GOP” stamped all over it. The Republican party may need a name change, and soon.
And as we learn just how much national treasure we wasted on corruption at the highest levels of the Bush/Cheney DoD, while our soldier-citizens scrounged for food stamps at home and for scraps of armor abroad, the best investments financial speculators can make will be in those industries that manufacture pitchforks and torches.
We in the opening acts of what will likely be a long and painful process, and there is nothing that Bush or Cheney can do to stop the long slide into relative national irrelevancy. Argentina, here we come… and GOP, there you go!
Col. Lang:
Thank you for your post. I appreciate your willingness to lay out your point of view with clarity and common sense.
Cummings is right. For whatever reasons, we are at a turning point.
For too long, as Obama has put it, we have allowed ourselves to be ‘distracted’ from the real issues at hand and we will continue to do so until enough of us remember that for Americans it has always been better to speak one’s mind than to hide behind the curtain of political correctness.
The ostensible newspaper of record, and the other media outlets now captured by corporate, bottom line thinking are so preoccupied with fairness that they avoid common sense at all costs.
Paine precipitated our Revolution. He didn’t create the conditions that brought it about.
The conditions necessary for revolt are again with us. The country is ripe for it. Obama may inherit Paine’s mantle if he continues to speak out.
As the poet said, we should be raging at the dying of the light and not going gentle into that good night. We are better than that.
Leila, it was said in jest. Lighten up. This contest is going all the way through June. We’ve got to keep a sense of humor or we’ll end up as crazy as Dick Cheney.
Col. and everyone in this blog,
1. What constitute victory for Dumbya? As far as I can tell, nobody knows so please enlighten me if anybody knows.
2. Hillary’s attacks are only making Obama stronger in the long run. His dirty laundry is coming out now where he can think about how to answer them. So far he has done well in some, not so well in others but better in Spring than in Fall.
3. There will be no joint ticket, this has gotten personal.
4. McCain has some dirty laundry in his closet too. In the Fall let see if he goes after Obama or Hillary.
5. Can anyone explain what happened in the final scene of “No Country for Old Men”? I think I missed something because it doesn’t make sense…lol
Jose
I want the question about “NCFOM” answered over on the Athenaeum in the movie review for the film. Good question. I think I know. pl
Jose:
The President of the United States had publicly stated 3 goals in 2003:
1- Removal of Saddam Hussein
2- Elimination of WMD in Iraq
3- (Liberal) Democracy (and the Rule of Law) in Iraq.
Of these goals, the first one is accomplished, the second one was already accomplished before the invasion, and the third one is accomplished if by “Democracy” you only comprehend representative government and not a liberal dispensation with the Rule of Law.
So, the 3 publicly stated goals are all accomplished. He could, at any time since 2005, declare victory.
“Endless War In the Name of Peace” motto of the Stiftung Leo Strauss.
Pat, you’re familiar with the Straussians, Cheney and Bush can best be explained by this philosophy–their most recent podcast spells much of it out.
http://www.stiftungleostrauss.com/StiftungLeoStrauss.mp3
On Cheney:
“What’s the deal with him? Is he really impaired somehow or is it about the money as the “oilies” insist?”
Simple:
CBS, 2003: Cheney’s Halliburton Ties Remain
The Phil $OSX (includes Halliburton) has quadrupled since the war started. Options usually have some ‘leverage’ … things add up …
—
Towards Mister Cumming upthread:
“Perhaps as another said Not the Beginning of the End but certainly the END of the Beginning when the US seemed to be REAGAN’s shining city of light on a hill for what now appears to be a very brief time and largely based on luck not necessarily skill. The world cannot operate successfully without a capable, competent, economically strong US but it is going to take some time to rebuild if it is to happen. Time for hard decisions. First, who has the skills to make them, and then who has the skills to see them through to completion.”
Perhaps you should ask the people of Nicaragua about that “shining city on a hill” (not Reagans invention btw but puritan/evangelic codewords -> John Winthrop (1588–1649))?
So the world can not ‘operate’ without a U.S superpower?
Well, the world can obviously ‘operate’ without a Roman empire, without a Spanish empire, without a British empire, without a 1000 year Reich.
It can certainly ‘operate’ without some lunatic phantasy of a militaristic “shining city on a hill” that is inhabitated by 5% of the world’s population but uses 25% of the worlds energy.
Guess this is what we get for having a president who is a recovering addict he talk like he live in iraq daily
Victory is the word that needs to be pushed stronger by our Media. We have had numerous Victories throughout this campaign and they need to be talked about in more detail.
Just think if our media kept talking about our conquests in Iraq then it may rub off on someone who will call it a day before Curly, Moe and Larry figure out the same.
Thank you Babak Makkinejad,
I know you are right but think that it was not worth it to get rid of Saddam.
Never send an Amy to do the job of a sniper or JDAM or an ambitious Colonel.
The other two are just fantasies to cover up for the greatest strategic mistake in America’s history.
IMHO, forget about the oil and the money focus on the simplest explanation, Bush and Cheney were to stupid to realize the neocons where full of S*(&!
An aged man is but a paltry thing,
A tattered coat upon a stick, unless
Soul clap its hands and sing, and louder sing
For every tatter in its mortal dress,
Nor is there singing school but studying
Monuments of its own magnificence;
And therefore I have sailed the seas and come
To the holy city of Byzantium. (Baghdad and/or Jerusalem and/or Washington lol)
Sailing to Byzantium by Yeats
Bush is performing his job exactly as those who put him in that position wanted (and i’m not talking about the American people). He is a front man, just as he has been in every position he has ever held.
It is too diffuse to call it a ‘conspiracy,’ however, I think we’ve gone beyond the point where the interests of the monied elites are aligned with those of the American people, whose chief role now appears to be taxpayer and consumer, not citizen.
It is not turning against our troops to say they should not be there, they should be home with their families. I completely support our troops and I completely believe they should not be in Iraq. To say let the Iraqi’s deal with Iraq may sound cruel but I say it anyway. Our men and women should not be dying there. Unfortunately we have a fool for a president
john mccain.
pow. wrong end of the torture procedure, for too long. that’ll burn yer brain, swift or slow.
call him an american hero who’s done the best he could and let him fade, honorably, away.
that’s a task the american “main stream media” could do for us. but they won’t. sad.
we don’t need obama and clinton on the same ticket, that’d be a waste of talent. president obama needs secretary clinton running state. wasn’t that long ago they both scared me, but they both seem to be learning on the tour. which is a good thing. unlike what we’ve had…
OK Lina, the last thing I want to be is humorless. Just yesterday I was having another belly laugh with a friend about my metastatic cancer (for real) so I absolutely can laugh about the Democratic primary.
On the internet, nobody knows when you’re kidding. Sorry I missed this one.
Come to think of it, my response did seem singularly humorless. AAAAH the primaries are finally getting to me. I thought I was so detached!
Back to the cancer and chemotherapy jokes for me… These have to be funnier than Barack vs. Hilary…
Surely you can only question his assuredness on Iraq if you actually believe the publicaly stated goals.
Everyone gets so worked up about the goal of a stable democratic Iraq being the goal. Says who?
A stable Iraq, as one entity, will grow to be a wealthy nation with a large standing army that it can afford to equip with the best weapons.
A truly democratic Iraq is one that will consistently elect an anti-Israeli, and by association anti-Western, government.
So a stable, democratic Iraq will be a bigger threat to Israel than Saddam ever was. And an ally of Iran.
Does anyone think that the current chaotic Iraq, with a secterian govt that relies on Western support to remain in power is anything less than what the Neo-cons want and intended?
“President Bush appeared to be attempting to redefine the invasion as a mission to remove Saddam Hussein…”
Too many people get this wrong.
From House Joint Resolution 114 which became public law 107-243:
“Whereas the Iraq Liberation Act of 1998 (Public Law 105-338) expressed the sense of Congress that it should be the policy of the United States to support efforts to remove from power the current Iraqi regime and promote the emergence of a democratic government to replace that regime;”
Joint Resolution
The Iraq Liberation Act did limit the methods used to remove the regime:
“Nothing in this Act shall be construed to authorize or otherwise speak to the use of United States Armed Forces (except as provided in section 4(a)(2)) in carrying out this Act.”
Congress changed that in 2002 with HJR 114.
As much as we like to complain that Bush keeps changing the story line, all the reasons they gave for the invasion are in the HJR 114 – including the belief that AQ was already in Iraq.
Everyone should read House Joint Resolution 114 for themselves and see what we the people, through Congress, actually said and authorized.
Alnval:
“The conditions necessary for revolt are again with us. The country is ripe for it.”
– I completely agree.
“Obama may inherit Paine’s mantle if he continues to speak out…”
– This would be nice, but I don’t see any evidence to support this. I used to like Obama, mainly because I thought he was being a populist out of tactical reasons, but now I’ve come to the conclusion that he and his people believe their own hype.
If Obama were the real thing, then he would be savvy enough to marry his solutions with the critiques of Ron Paul. But he’s not, and he doesn’t.
I’m sick of hearing about unity. Democracy and capitalism revolve around competition. Tyrannies revolve around unity. This revolt you mention is really just making elites who fail actually lose something.
First black / woman president? That only matters to those old enough to know Jim Crow and those sheltered enough to think it’s a big deal. What would really be radical today would be a president with no connection to the Ivy League.
Wow, the conclusion seems somewhat at odds with some of your prior statements vis a vis Obama. I don’t blame you for that; I think that changing one’s mind in response to the facts on the ground is a good thing. And I assume that it this case, the revised understanding of the facts on the ground has less to do with increased respect for Obama, and more to do with increased understanding of McCain’s “impairment.” (Which has become even more shockingly apparent of late).
Col. Lang:
“Then, there is John McCain. He does seem impaired. Lieberman had to remind him that AQ is a Sunni group who hate the government of Iran?”
Is McCain scare-mongering, or is he really impaired?
Any comments on http://www.salon.com/opinion/greenwald/2008/03/20/mccain/index.html ?
Re: Twit, from Obama’s speech, his idea of unity is not mindless agreement. In the matter of race he wants to acknowledge the very real anger that some people feel over affirmative action, for instance, and not sweep it away by labelling as racism, but to honestly address it. In the matter of unity, as Obama put it, we have a choice of getting endlessly distracted by small things or else to focus on the big issues that affect us all. He wants us to be united in not being distracted.
Obama is calling for a unity of the following kind:
“For we have a choice in this country. We can accept a politics that breeds division, and conflict, and cynicism. We can tackle race only as spectacle – as we did in the OJ trial – or in the wake of tragedy, as we did in the aftermath of Katrina – or as fodder for the nightly news. We can play Reverend Wright’s sermons on every channel, every day and talk about them from now until the election, and make the only question in this campaign whether or not the American people think that I somehow believe or sympathize with his most offensive words. We can pounce on some gaffe by a Hillary supporter as evidence that she’s playing the race card, or we can speculate on whether white men will all flock to John McCain in the general election regardless of his policies.
We can do that.
But if we do, I can tell you that in the next election, we’ll be talking about some other distraction. And then another one. And then another one. And nothing will change.
That is one option. Or, at this moment, in this election, we can come together and say, “Not this time.” This time we want to talk about the crumbling schools that are stealing the future of black children and white children and Asian children and Hispanic children and Native American children. This time we want to reject the cynicism that tells us that these kids can’t learn; that those kids who don’t look like us are somebody else’s problem. The children of America are not those kids, they are our kids, and we will not let them fall behind in a 21st century economy. Not this time.
This time we want to talk about how the lines in the Emergency Room are filled with whites and blacks and Hispanics who do not have health care; who don’t have the power on their own to overcome the special interests in Washington, but who can take them on if we do it together.
This time we want to talk about the shuttered mills that once provided a decent life for men and women of every race, and the homes for sale that once belonged to Americans from every religion, every region, every walk of life. This time we want to talk about the fact that the real problem is not that someone who doesn’t look like you might take your job; it’s that the corporation you work for will ship it overseas for nothing more than a profit.
This time we want to talk about the men and women of every color and creed who serve together, and fight together, and bleed together under the same proud flag. We want to talk about how to bring them home from a war that never should’ve been authorized and never should’ve been waged, and we want to talk about how we’ll show our patriotism by caring for them, and their families, and giving them the benefits they have earned.
I would not be running for President if I didn’t believe with all my heart that this is what the vast majority of Americans want for this country.”
http://www.huffingtonpost.com/2008/03/18/obama-race-speech-read-t_n_92077.html
David W.
You are dead right in my opinion!
I have a question that I wonder how the commenters and Col. Lang would answer. If it is too off the wall, then it will experience the pleasures of the oubliette.
The economy of the United States is under tremendous strain. The source of that strain is the fact that debt has gone out of fashion.
You may say that after some house-cleaning or some other process debt will come back in fashion. Not so much.
In the first place, the Fed has been lowering interest rates non-stop and debt has not come back in fashion.
In the second, the dollar is in the cellar. The pressure to raise interest rates is very strong. Certainly at the first indication that debt is back in fashion, but I sincerely believe that indication will never come.
So with this much strain, what is going to give?
The plutocracy has already signaled that it will protect its own. We can’t expect to see Allan Greenspan tried for treason, which would be the appropriate outcome.
What is left is employment. I attach a probability well in excess of 50% to Great Depression levels of unemployment, or worse.
And when that comes, I expect civil unrest. Real civil unrest.
What will the military do under those circumstances? Will they act independently? Will they be able to act at all?
Department of Backdrop cont.
For those of you who believe that AIPAC is not in charge of the US government, try this on for size.
This is from a column written by Robert Novak in today’s Post. Not exactly a bomb-throwing liberal.
The Fed on a Limb
By Robert D. Novak
Thursday, March 20, 2008; A15
The Federal Reserve’s unprecedented bailout of Bear Stearns was crafted not at the White House or the Treasury but in secret by a New York central banker whose name is unknown to Washington power brokers and who was a Clinton administration presidential appointee.
The plan pressed by Timothy F. Geithner, president of the New York Federal Reserve Bank, effectively substitutes the central bank for the market in determining financial outcomes.
The 46-year-old Geithner, who as head of the New York Fed maintains a traditionally intimate relationship with Wall Street. Neither a banker nor an economist, Geithner left Kissinger Associates in 1988 at age 27 to go to work at the Treasury and began an uninterrupted career in government service; he was promoted in 1999 by Treasury Secretary Robert Rubin to undersecretary for international affairs.
[can you say “Mossad”]
Geithner’s plan to open the Fed’s discount window for the first time to non-banks stunned the financial community. An influential statement of support for the bailout came from Sen. Charles Schumer, who heads both the Joint Economic Committee of Congress and the Democratic Senatorial Campaign Committee. Although Schumer is not known for nonpartisanship, he is a New Yorker who is close to the securities industry.
The reaction in the hinterland was far less favorable. The Washington office of the Independent Community Bankers of America was flooded by members from across the country complaining of discriminatory favoritism toward their big-city brethren. If they had blundered into financial failure, the community banks said, they would not be bailed out but would be investigated and prosecuted. “Too big to fail,” therefore, becomes “too big to be punished.”
The Bear Stearns bailout, approved in private by unelected officials, contributes to paranoid grievances on the left and right that built support for Ron Paul’s presidential candidacy. A Fed official conceded privately this week that “we may have crossed a line” in jumping into Bear Stearns — and that is an understatement. There is no doubt that the U.S. economy is in uncharted territory, with reverberations that cannot be forecast.
I am convinced with the financial fallout of contemporary crony capitalism with privatization of profits and socialization of banking losses the Bush/Cheney administration will go down in history as our absolute worst presidency. They used their free market, democracy and ownership society dogma as cover to enable unprecedented speculation and phony accounting profits. In 2006 Bear Stearns paid their executives $2.5 billion in bonuses and if they had issued their quarterly financial statements as scheduled this week they would have shown a balance sheet with a book value of $80/share. We know what it was really worth – $2/share. Can anyone now believe the financial statements of any of these Wall Street and banking firms? Integrity has been eviscerated through official sanction!
Note that even many Blue Dogs are no longer afraid of the Cheney regimes fear to gin up votes tactics. Many freshmen reps in Congress despite all the attack ads in their districts voted to allow our courts to determine the legal culpability of our telecom companies on the warantless spying on our citizens and to form a congressional commission to investigate these extra constitutional acts.
Yes Pat, Obama is campaigning on ending the war and bringing our troops home while talking with our adversaries in the Middle East. He is also tying the financial cost of the war to real economic problems here at home.
The Democratic nomination will run its course and despite what you read on many blogs the campaign has been rather civil between Hillary & Obama. Either candidate will be better in my book compared to a delusional McCain who is campaigning on the Cheney platform. IMO, Obama will win the nomination as he is slowly but surely consolidating the super-delgates while insuring his pledged delegate spread. The real question is – are the baby boomers ready to vote the next generation?
Col.
This request may well go against the rules of this blog. If so please trash can it. I simply wanted to convey my but i did want to reach out to her.
situation and my deep hopes for her recovery.
Perhaps it is simply being an active Episcopal Priest for the last 45 years, but I did want to reach out to her.
Thanks,
Frank Durkee
The dangers of middle of the night blog commenting. I am embarrassed to have spouted off about my health above. I make stupid jokes about it but it must be disturbing to those who don’t have to live with it as I do. So sorry. I am hanging in there and coping well with God’s help.
Thank you for all the kind wishes though, and thank you for your indulgence of my self-indulgent blather.
Ah, wrong thread, never mind…
Here’s more gossip for the grist mill. A relative in the California National Guard was deployed to Baghdad in Sept. ’07 for what he was told would be 13 to 15 months. Now he is told he’s coming home in April ’08, after seven months.
My paranoid mind puts together W. Polk’s prediction of impending war with IRan (see J. Cole Informed Comment) and the early return of Cal. national guard and wonders what is going to happen in April? Vague apocalyptic fantasies. Arbogast’s questions about civil unrest above just fuel those flames.
However it is better for me to use my storytelling powers to finish the novel in progress I’m writing, not make up possible fantasy scenarios about the end of our Republic.
COl. Lang, if there’s some reason why I should not be posting details of deployment dates on line, please feel free to reject/delete this comment. I am just not sure.
Novak is not a bomb throwing liberal, but that is a Dick Morris brand T*rd in the Truffle Box® disinformation hit piece. In the first paragraph he associates Geithner with the Clinton Administration which leaves the sloppy reader (such as myself) with the impression that it was the Clinton Administration that empowered Geithner to do this.
It is the only mention of his career history. From what Novak has told me I would have no idea that Geithner was in fact a Reagan-Bush appointee in 1988 and only promoted by the Clinton Administration in 1999, or —
I am probably belaboring the obvious.
My post referred to arbogast’s comment at
http://turcopolier.typepad.com/sic_semper_tyrannis/2008/03/bush-is-still-s.html#comment-107712992
Interesting that you bring up America’s current attitude toward its soldiers, who have indeed faded from our view as the MSM and our deranged leaders and leaders-to-be (McCain) declare “We’ve Won!”
There doesn’t seem to be much reason to think that any level of “anti-militarism” ala the post Vietnam years is in any way starting. The national piety toward the soldiers and their largely positive attitude toward their “mission” still seems pretty high to me, and I don’t know what could be pointed to to indicate it is being undermined.
Nor does there seem much concern or dissatisfaction that much of the military will essentially have to be “rebuilt” as a result of this absurd oil adventure. In fact, all the prez candidates outdo themselves with promises to expand the ground forces in the near future. We appear quite sanguine about the monetary cost of Iraq.
So I don’t think our militarism is in much danger as we “write”.
Will that change as the economy melts down, the dollar collapses, jobs and consumption disappear, the national debt skyrockets and the opportunity costs (those things which we could have spent all the Iraq money on) become clear, as well it becoming clear that all those things are now beyond our grasp forever and that we destroyed ourselves slavishly agreeing to Cheney’s militarism for oil?
Who knows? It will be interesting watch.
Senator Obama would make a good Secretary of State or a good Chief Justice of the Supreme Court.
Couple quick comments on the economic side of this thread…
First, it’s not that debt has gone out of fashion in the U.S. — it’s that the country is increasingly insolvent, at the micro- and macro-scale and everywhere in between.
There’s so much debt that households, businesses, and even the U.S. government must dedicate substantial and increasing fractions of income merely for debt service, and that opportunity cost problem simply cannot continue for much longer (it is obviously already past remedy for many families and businesses, e.g., Bear Sterns).
The Fed can improve problems with liquidity (and it is trying to do so now), but it can’t really do much about insolvency, so their efforts of late will not likely lead to success in remedying current and future economic ills.
Also, the Fed exists to stablize the banking system, but its recent actions are oriented towards stabilization of the so-called shadow banking system instead. That misapplication of Fed policy is bad enough, but the Fed is now using up its economic ammo fighting on behalf of non-bank financial firms and hedge funds, and has precious few bullets left for fighting threats to the actual banking system, should they occur. And they will occur. And then what?
So we’re headed for trouble, and we have the economic equivalent of the Bush administration Katrina rescue team now on the job, making things up as they go along, and sacrificing the citizenry while they protect the well-connected. Heaven help us all…
Bush HAS to be “sure” about Iraq. How could any average man live with himself after making that decision?
Col. Lang:
re questions raised by commenters about whether the Fed is managing appropriately the country’s economic problems. And, I have particular difficulty with comments suggesting that the actions of the Federal Reserve are on a par with Michael Brown’s management of FEMA.
The Fed Chair, Ben Bernanke, is a well-regarded economist with an excellent academic background. He is reputed to be an expert in the Great Depression of 1929 and his efforts to this point, including his allowing for an orderly liquidation of BearSterns instead of backruptcy, have most likely forestalled a run on the United States and Global banking systems that was in the offing just a weekend ago.
Bush has no idea how bad things are economically: think 4 dollar a gallon gasoline and 10 dollar a bushel wheat. His active support and encouragement of a laissez-faire, anti-regulation approach to the functioning of any government department whether Treasury, Justice, Housing, you name it, has left the country virtually bankrupt both morally and financially.
During his time in office Bush’s laissez-faire economic policies have allowed for the creation of an unregulated securitization process that takes potential assets, such as mortgages, and converts them into securities without regard to liquidity.
Over the past year or so, these questionable securities have come to light forcing banking institutions to acknowledge that borrowers who use them as collateral may not be able to pay back the money lent to them.
Millions and billions of dollars have been lost by holders of these securities, sometimes called Collateralized Debt Obligations (CDO) all over the world; Paris, Australia, Norway as well as investment and other banks in the United States. Worse, as the process of creating these CDOs has no paper trail attached to it, there is no way to determine the underlying value of any part of the CDO.
Thus, banking institutions throughout the world have been forced to accept that they could no longer use this paper as collateral because no one, let alone the bank holding it, could determine its value.
This is what makes lenders unwilling to lend; if your borrower’s assets are suspect the risk of them not paying you back goes up eventually to a point where making the loan is not worth it. The only way the borrower can regain the trust of their lender is if their assets become transparent and a realistic value placed on them, or if the loan itself can be guaranteed by some independent entity.
Thus, Bernanke’s willingness to allow the Fed to guarantee J.P. Morgan’s purchase of BearStearns’ paper (virtually without audit to determine its real value) probably prevented a genuine financial catastrophe.
The Fed’s willingness to do this with a private bank and at the risk of increased moral hazard says more to me than I really want to know about the level of economic risk our country faces. It’s scary. And, Bush is doing nothing about this problem either.
Alnval:
Thus, Bernanke’s willingness to allow the Fed to guarantee J.P. Morgan’s purchase of BearStearns’ paper (virtually without audit to determine its real value) probably prevented a genuine financial catastrophe.
Perhaps. And perhaps not…
That decision is not even a week old, and was unprecedented in Fed policy, as others have pointed out here. The credit crisis appeared in force last July, has been causing serious problems ever since, and was obvious to those paying attention long before that.
Thus it is way too early to assert that this weeks’ Fed decisions have prevented a catastrophe. Bernanke may have postponed a major insolvency event, but that’s not prevention, and it could be little more than the act of buying some more time for the most well-heeled investors to continue playing with what Warren Buffett once called “financial weapons of mass destruction”.
There simply isn’t enough information available yet to assert that a meltdown in the U.S. financial sector has been averted, and there isn’t enough information to assert that things are going to be just fine (or even that things are not going to be just fine). And that’s the fundamental problem here, namely “nobody really knows what’s going on”, hence the allusion to a similar situation in New Orleans.
I wish Bernanke good luck, but I also wish he’d keep his powder dry, as this asset-unwinding mess is likely just getting started. And I’d have a lot more confidence in the Fed if it wasn’t top-heavy with Bush appointees, who aren’t exactly known for their pragmatism and sensitivity to real-world concerns.
For anyone interested in the obvious interactions here of economics and epistemology, I’d recommend Taleb’s recent book “The Black Swan”. It’s a good read, and Taleb’s work was clearly motivated by the shenanighans he observed on Wall Street. But his book contains much of interest about the general problem of trying to gather accurate and sufficient intelligence in support of good decision-making.
Recent calculations by some economists indicate the overall price tag of this unnecessary war will be in the 1-3 trillion range if not more.
Cost-benefit to the American taxpayer???
1. Perhaps an SST reader/economist could project an earnings range from Iraq oil production at say 2mbd for next few years then to 6mbd say after 5 years?
2. How much of whatever the profits to US companies would accrue directly into the US Treasury should US oil companies gain a percentage (pick a range of percentages) of the production, etc.? One would expect the Chinese, Russians, French and others to get into the picture as well.
3. How do these numbers relate to the US$1-3 trillion price tag?
A comment was made in this thread about the US as a financial center. History records London was the world’s financial center prior to WWI, then New York after WWI. I read in the last year or so that London has overtaken New York now as the major international financial center in most categories (save hedge funds I think).
Just a day or two ago, the EU-15 was said to have passed the US GDP measured in Euros at a 1.56 rate, or thereabouts.
I note a Russian steel corporation is about to buy Sparrow’s Point.
For somewhat older data on EU-US stats:
http://www.eurunion.org/profile/EUUSStats.htm
Col. Lang:
I take Cieran’s meaning that the downstream consequences of the Fed’s recent actions to quell a run on our banking system are yet to be known.
As I see the problem, however, the country is in a financial situation not alike that of the Buffalo Bills football player who recently needed immediate treatment for a critical neck injury. The docs treating him ‘went experimental’ and did it quickly and it worked. The player who had been at risk for quadriplegia is now walking again. Football is no longer in his future but maybe that’s a limitation he can afford to endure.
In my mind, Bernanke believed that the risk of inaction only guaranteed disaster. I think he was right.
When the enemy is coming over the hill debating whether to defend yourself before taking action is not an option.
For Cheney it is STILL only about oil and “stabilizing” (keep oil as high as possible) the price.
Alnval & Cieran
Bernanke and Paulson have their finger in the dike to try to prevent the realization that a significant number of the major commercial banks and broker/dealers are technically insolvent and seriously capital impaired. Between the Fed, Treasury and Congress they will do everything in their power to make sure no one knows the real condition of the opaque balance sheets of these financial institutions. Don’t be surprised if Fannie & Freddie get nationalized. And don’t be surprised when the Fed will take the haircuts on all those Wall Street private label assets that they are now accepting as collateral. And don’t be surprised when they change accounting rules so that none of these banks need write down the value of these assets to what a real buyer would pay. Level 3 assets will continue to be valued any way these banks want them valued. None of those that made the gargantuan amounts will pay anything. There will be no transparency. And all this will be done in the name of maintaining the “integrity” of the financial system.
The issue is not if Bernanke is a good student of the Depression and has acted to prevent a run on all the banks. The issue is why did our banking regulators led by chief cheerleader Alan Greenspan abet and enable unprecedented speculation and phony accounting profits that led to billions of dollars of bonuses for executives and hedge fund managers.
Is anyone going to go after the clear as day conflict of interests between rating agencies, insurers and Wall Street? Is anyone even discussing if repealing Glass-Steagall was a good idea? Is anyone even seriously considering how can we prevent this from happening again? Is anyone looking into who should be accountable for US taxpayers effectively taking on the risk of unwinding all these fantasy assets while Wall Street titans walk away into the sunset with their million dollar yachts and get to do it once again a decade hence?
Zanzibar
Great summary – pithy and trenchant as well as undeniably correct!
You also ask the broader questions but, except for Greenspan, whose grant of sainthood is now being revisited, you don’t name the villains of the piece.
We could start with Carter who first deregulated airlines and proceed from there. But like the guy who slips on the banana peel and breaks his leg you don’t worry about littering you worry about getting to the hospital. And, Bernanke seems to be doing a good job in ER.
That Bernanke might not want to advise the country with letters of fire that the economy is a mess should be understandable. That we also need to cope with your questions of accountability by
exercising the franchise in November is also self-evident.
What I’m pleased with is that the need to get involved in the politics of our time is becoming more and more important to more and more of our citizens.
Throw the rascals out should be on every bumper in America. If we don’t throw them out, and reset our course with rational argument, the distractions we have been warned about will overtake us and your implicit prophecy will be fulfilled.
You remind me again that the country is ripe for revolution.
Alnval:
I take Cieran’s meaning that the downstream consequences of the Fed’s recent actions to quell a run on our banking system are yet to be known.
Actually, I’m suggesting (in the spirit of the title of the Colonel’s post) that we cannot be “sure” of whether the Fed’s recent actions are even intended to “quell a run on our banking system”, much less whether the downstream consequences can be predicted. Please note that Bear Sterns is not a bank (hence the term “shadow banking system”).
There is some evidence to indicate that considerable pressure from the White House is being brought to bear on the Fed’s decision-makers, so the Fed’s recent actions may be almost entirely about politics, not economics. But we don’t know.
And continuing further in a direction that Zanzibar ably illustrates, there is even some evidence that the entire Fed takeover of Bear Sterns might be little more than a ruse to avoid anyone having to mark these toxic investments to their current market value, so that these actions are not a bailout or a cure, but are instead more akin to a cover-up!
The bottom line is that we don’t know what is happening in these markets. Warren Buffett doesn’t even know what’s happening in those venues where he has such investments (that’s what motivated his now-famous WMD terminology). Isn’t transparency supposed to be a fundamental aspect of efficient free markets?
Taleb points out in The Black Swan that the problem in play here may involve so much uncertainty that it becomes essentially unknowable, hence the epistemological implications (which form the angle to this story that I find most interesting).
So I’m suggesting something much more akin to the Colonel’s title here, with the key word sure cast in quotation marks.
Interesting article with video about how our Sunni militia “friendlies” are becoming distinctly unfriendly, citing grievances. A Sepoy Rebellion II perhaps in the making? Thank goodness they don’t have to bite the cartridges anymore–it’s anyone’s guess WHAT Halliburton would use to grease them!
http://www.crooksandliars.com/2008/03/21/the-guardian-the-surge-may-be-on-the-verge-of-collapse/
Col. Lang:
The Zeitgeist strikes again!
Last night, Paul Solman on the Newshour did a basic 15 minute show and tell with visual aids explaining the securitization process, CDOs, and their impact on the global banking system.
This was followed by a Judy Woodruff 10 minute interview with Robert Rubin former Treasury Secretary under President Clinton and now Chair of Citigroup who discussed the implications of these issues for the average investor.
For anyone who’s interested these News hour segments are available at
http://www.pbs.org/newshour/newshour_index.html
– 30 –
Bob Rubin, current Chairman of Citigroup, previously Chairman of Goldman Sachs, Bill Clinton’s Treasury Secretary. A major exponent of free markets and globalization and instrumental in getting us NAFTA and the repeal of Glass-Steagall that Clinton signed into law. Happily collected multi-million dollar compensation from Citigroup shareholders for his fiduciary duties while Chuck Prince was dancing away! Now unmasked as a socialist when his stock options are at stake.
Or take a look at uber-capitalist Bill Gross, bond maven and head of bond behemoth PIMCO suddenly become a socialist as his books are loaded with all kinds of asset backed securities that currently have a hard time finding a bid.
Alnval, we really need a revolution as we’ve seen this movie before!
In the 80s new age of capitalism we had the “unlocking of shareholder value” through LBOs financed by junk bonds. Carl Icahn and Kirk Kerkorian epitomized the brass knuckles of American capitalism. And Mike Milken was paid over a billion dollars in a single year by Drexel for his genius. Of course he and pal Ivan Boesky spent some time at Club Fed. But note that they got to keep most of their stash.
Then we got the S&L era. And lets not forget John McCain and the Keating 5. Or Neil Bush and Silverado Savings. Middle class taxpayers got stuck with the bill as usual as the RTC was formed to clear the assets. And let’s not forget the dire warnings of a collapse of the financial system and the doctrine of “too big to fail” if Joe Public did not ride to the rescue.
In another cycle we had LTCM where a bunch of Nobel laureates were allowed to gamble with other people’s money and lost big. Alan Greenspan, Ayn Rand disciple, forgot about Howard Roak as he provided the backstop. (The irony – Merriwether once again successfully vanished money with his latest speculation venture. So much for that Nobel prize!)
Soon after LTCM we saw the dotcom “paradigm shift” and “discontinuous innovation” that would make selling pet food online the next big thing. Let’s not forget Greenspan crowing about the “productivity miracle” as investors chased any stock with a .com. And as that insanity came down to earth with Enron, Worldcom, Global Crossing and the dotbombs we got the standard response to pain on Wall Street – “mo money” care of Uncle Greenspan. OK – Dennis Kozlowski & Bernie Ebbers got nailed.
I am afraid the nexus of the political elite and the corporate/financial/media elite to gorge on the backs of middle class Americans is too powerful for a standard edition revolution.
Cieran is right. We cannot be sure if the standard response of taxpayer bailout of the wealthy will easily get animal spirits going again in this cycle. The financials are too opaque and there is way too much leverage across the board. And what happened to Greenspan’s theory that financial innovation is ushering in a new era of risk management with widely dispersed risk in the right hands. And now they are talking about meltdown!
What is astounding is that the “thought leaders” who get the media time and are the most influential are the same guys who drove us over the cliff in the first place. On Iraq what sense does it make to listen to Bill Kristol or Dick Cheney? Similarly, why would we want to listen to Bob Rubin, Alan Greenspan and Hank Paulson on how to solve the credit bubble unwind? We should know what axe they have to grind. Why don’t we listen to Warren Buffet and Paul Volcker who warned of the exact scenario we see today several years ago when we had a chance to prevent it? Why is it that corporate executives get to keep their gains when their company restate financials showing shrinking assets and non-existent profits? How come Bob Raines (another Clintonista and Rubin pal) got to keep all his compensation based on the stellar performance of Fannie when restated financials showed huge losses? And now regulators are going to allow Fannie and Freddie to once again load up on another $2 trillion of mortgages & MBS guarantees with reduced capital. Where is the SEC in all these shenanigans? Yes – they got Martha Stewart for insider trading!
The swashbuckling capitalism in America is about creative destruction for the machinist in Ohio and raped pension funds for workers in Delphi & Enron. Limited government means railing about the $200 for the “welfare queen” allegedly scamming the system. But when it comes to the gravy train for the elites then its socialism or else they claim the system will fail and we will all be destitute or the terrorists will get us. When will we demand accountability?
Mr. Swashbuckling Capitalist
There was a protest song during the Vietnam War about an officer who drowned several of his men by inisisting upon fording an unfordable river. The song was called, “Waist Deep In The Big Muddy.” As the soldiers complain that the river is deeper than they think, the constant refrain is, “But the big fool said to push on.”
One final point and I will get off my soapbox.
If the Fed action regarding the duress buyout of Bear Stearns by JP Morgan Chase is allowed to stand we have effectively become the USSA!
Let’s call a spade a spade. The $30 billion non-recourse “loan” that the Fed provided JP Morgan is in reality a put option to a single private entity to make Bear Stearns bond holders (including unsecured bondholders) whole and to provide a windfall to JP Morgan at the expense of US taxpayers.
Its clear this action has nothing to do with preventing a systemic failure of the financial system. Instead its the Federal government underwriting the risk to benefit bondholders of a private corporation and shareholders of another private corporation. An insider trade!
This is another example of an extra-constitutional act of this Administration and if Congress does not act to rescind this there should not be any doubt that we no longer live in a constitutional republic.
Col. Lang:
I’m going to briefly pick up my – 30 – and add a footnote to my last comment.
Mark Thoma, an economist at the University of Oregon has a March 23 post in his blog Economist’s View titled “A Coordinated Effort to Destroy Effective Regulation.” This speaks to the issues identified by both Zanzibar and Cieran regarding Bush’s deliberate and planned destruction of banking regulations and the earlier rescinding by Congress of Glass-Steagall, all of which, were they still in place would have prevented much of our current economic turmoil.
Thoma’s post can be found under “Recent Posts” at:
http://economistsview.typepad.com/economistsview/